For growth stage companies, Q4 is always an exciting time for sales leaders and their teams. There is an exuberance that comes from closing deal after deal during the largest months of the year! For every Sales VP or Chief Revenue Officer (CRO) on planet earth, there are four top priorities in Q4:
- hit the number
- hit the number
- hit the number
- start Q1 FAST – build your growth plan for the next year
Clearly HIT THE NUMBER needs to be the predominant focus for the entire company during Q4. At the same time, executives need to balance Q4 execution with growth planning or the tyranny of the urgent will delay your fiscal start by 1-2 months and fuel the already high sales team turnover rates we see in January / February. Here’s a guide to help you both HIT THE NUMBER and get a FAST START to Q1.
Hit The Number
Pipeline and Forecast. Before you do anything else, do your math and check ‘must win’ deals to get a sense for your confidence in your pipeline and the activities you need to focus on in Q4. This will help you decide how much focus you need on lead generation in addition to velocity on existing deals. If you have been selling with a few good soldiers but without clear sales stages and forecast criteria, you may want to adopt some simple standardized way of evaluating whether a opportunity is real and how advanced it is. Sales forecasting is much easier than you think, and much more useful than you imagine. It’s not about guessing the future correctly. We’re human; we don’t do that well. Instead, it’s about assumptions, expectations, drivers, tracking, and management. In Q4, you should review and revise your forecast almost daily.
Count Q4 Selling Days. After December 16, selling will slow because customers are not buying as much and many people are on vacation. After you factor out all the Q4 holidays, you have 50 good selling days and 10-14 crappy ones depending on how you count Thanksgiving week. Build your entire plan on closing early and communicate that to your team.
Keep Positive Energy High. Plan for at least three big-fun-loud all hands standups in Q4: October Week 1, November Week 1, and November 28 (the first day back from Thanksgiving weekend). Plan for 15-min daily stand ups many mornings and evenings. Have guest speakers (like the CEO) come in to encourage and pump up the team. At Xamarin, we always did plank to get team energy up, and we celebrated/reward people from nearly all roles daily.
Encourage Crazy Stuff. Talk to your sales managers and millennial culture creators about helping your teams self-organize work activities that are super fun – and way beyond the normal work commitment. At Xamarin, we encouraged our teams to think big about what we could do to hit the number during a couple of particularly tough months. They self-organized to have round-the-clock coverage for phones and email (including weekends) for about two weeks. We killed our numbers and they loved it.
Help, Coach, Inspect. You have to get your pipeline up and forecast right, but consider letting your sales ops director take the lead on forecasting and deal inspection. This allows your sales managers to focus on being as helpful as possible in serving their teams. It also adds extra sales capacity to Q4 that might not otherwise be there.
Growth planning is an important strategic activity for companies who are tired of wasting money on sales hacks that don’t work. We love this stuff so you can either download our Free DIY Growth Planning Checklist or let us do the analysis and create final deliverables for you through our Growth Planning Accelerator. Most high growth companies create this plan, present it annually to the board, and then build their sales scorecard and management pack to keep up to date with metrics throughout the year. The goal is to answer the following questions:
- What growth levers should management focus on to drive the business?
- What is working well, and what needs to be improved?
- What is the impact on cash and profit/loss of hitting the accelerator?
Tip: Get a small, crack team together from sales ops, marketing, and sales management to lead the analysis, and you will smoothly transition from strategic planning into daily execution without affecting Q4 sales productivity. Download our DIY Growth Planning Checklist, or let us do the analysis and create final deliverables for you.
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Begin with the end in mind. If you want to move quickly from Q4 to Q1 execution, begin with the end in mind. While the planning process among your C-suite should be highly collaborative, it should also be a decision-making process. There are 5 ways to build a $100M company after all. Here are some deliverables that sales management and operations needs in order to execute your strategy in full force:
- Business Tiers – What will be your business tiers (e.g. freemium, prosumer, SMB, enterprise)?
- Sales (and Customer Success) Playbook – What people, campaigns, tools and incentives do you need to support your customers’ buying journey for each business tier?
- Operational Handbook – What systems do you need in place to make consistent data-driven improvements ongoing? What programs/processes do you need for territory management, account management, opportunity management, call management, and sales enablement?
- Sales Scorecard – How will you align metrics for desired business results, strategic sales objectives, and tactical sales activities?
Challenge traditional thinking. For growth stage companies, CEOs need to challenge traditional thinking that hiring more salespeople is what grows revenue. Hiring top sales talent can be an expensive (and disappointing) investment since it creates dependency on a few top sellers and is ultimately not scalable. Focus your energy on building a sales organization that creates ongoing predictable revenue through: 1) predictable lead generation, 2) sales development teams that bridges marketing investments and account executives, and 3) consistent systems and training programs (especially on-boarding).
Understand your unit economics. The only way to understand what is working well and what needs to be improved is to examine your SaaS business by the numbers. Your goal should be to understand performance, conversion and volume metrics so you can set aside your linear growth model and identify opportunities to boost productivity and economies of scale. For more details, read our post on Developing Your SaaS Growth Model.
First buying journey, then selling process. Map your customers’ buying journeys for each of your business tiers starting with their online experience. By doing this early, you can align all of your sales plays, players, and processes to your customers’ key buying decision points. Note: Do not over interpret CEB research that customers should be 60% of the way through their purchase before they engage with your sales teams. Get in there and help prospects as early as possible.
Get a Fast Start. After Q4, you need to be careful about sales team burnout and at the same time get the fastest start possible to your fiscal year. On average, a fast start can add 10% sales capacity to your team, and have a massively positive effect on your results in the coming year. Aim to finish your fiscal as close to 12/16/2016 as possible and give your teams the last 1-2 weeks of the year off so you can roll out systems changes and they can start back refreshed and ready to go. I strongly recommend sending a strategic ‘thank you and fast start’ email on the first day of your new fiscal and hosting a meeting or webinar to present your new strategy during the first two weeks of the year. The clearer your execution plan, the lower your attrition rate and the higher your sales productivity will be.
We created SalesSmyth because we knew there had to be a better way for growth stage companies to build their sales organizations. We’re sales leaders and consultants, so we’ve seen firsthand the effects of building a sales team by the seat of your pants: higher burn rates, lower valuations, and less control over the future of your company. So we ask ourselves the question that drives us, “What can we do to help entrepreneurs build high performing sales teams that lead to explosive growth?” We are on a mission to deliver torrents of revenue by designing, training and equipping sales organizations to do their very best work.